The Standing Committee on Government Operations recommends that the Government of the Northwest Territories, giving consideration to the observations made in this committee report, strive to improve upon the information in the Financial Statement Discussion and Analysis section of the public accounts that indicates how the GNWT has met the provisions of the Fiscal Responsibility Policy related to debt servicing and infrastructure financing.
Borrowing
When the GNWT does not have sufficient cash resources, it must rely on short-term borrowing to meet cash flow requirements, such as payroll. Short-term debt is defined as borrowing for a period of time that is 365 days or shorter. A limit on short-term borrowing used to be set in the Borrowing Authorization Act (BAA). Although Note 8 refers to the Borrowing Authorization Act, the new FAA, which came into force on April 1, 2016, eliminated the need for the BAA, which has since been repealed.
Starting with the 2016-2017 fiscal year, the short-term borrowing limit is now set in the Appropriation Act and referenced in the GNWT's annual borrowing plan. The borrowing plan can be found on page xv of the 2016-2017 Main Estimates. The Comptroller General confirmed for the committee that the reference to the BAA was outdated, and will be updated to reflect the current legislative framework in future years.
For the government reporting entity, both short- and long-term debt are reported under liabilities in the Consolidated Statement of Financial Position. For 2016-2017, long-term debt increased by $110.6 million (24.5 per cent) to $561.7 million. The GNWT attributes the increase in long-term debt to "work done to date on the Mackenzie Valley Fibre Link and Stanton Territorial Hospital Renewal projects." Short-term loans decreased by $42.6 million (15.4 per cent) to $234.8 million.
Protection of Privacy and Disclosure of Information
The Non-consolidated Schedule of Bad Debt Write-offs, Forgiveness and Student Loan Remissions (Schedule 9) contained in Section II of the public accounts continues to identify, by name, all individuals who have received a remission of their student loans and the amount of that remission. The committee has two concerns with respect to Schedule 9.
First, student loan remissions are a positive indication of a northern resident student's completion of higher education. By reporting these remissions in the same schedule as write-offs and forgiveness of bad debts, which have negative connotations, the GNWT creates a situation in which student loan remissions may be conflated with bad debts. A casual reader, who does not understand what a remission is, or how the process works, might interpret the amounts written beside a student's name as being indicative of a bad debt, given this wording appears on the page header in the schedule. Schedule 9 does include a description of the student loan remission process to guard against this, but it is still a risk.
This risk is exacerbated by the fact that the public accounts are text-searchable, meaning that any potential creditor who is searching financial information about a loan applicant would be able to find that applicant's name and the amount of their loan remitted by the GNWT. This is a data-matching practice outside of the GNWT's control, but inadvertently enabled by current technology and the GNWT's decision to post the information as it currently does.
In the past two reviews, the committee has made recommendations designed to compel the GNWT to reconsider its position on this matter, including a recommendation made in the last review that the department consult with the IPC and with the Department of Education, Culture and Employment to determine whether or not consent is obtained from student loan applicants for the disclosure of this personal information.
The standing committee recognizes that government must strike a balance between protecting the privacy of an individual's personal information and disclosing information that is in the public interest. However, the committee believes that the degree of disclosure related to this information is not required under section 65(1)(b) of the Financial Administration Act and may, in fact, constitute a breach of privacy of those individuals named in the schedule, which is the committee's second concern with Schedule 9. It should be noted that the committee's view is shared by the Information and Privacy Commissioner of the Northwest Territories (IPC) who has communicated her views to the Department of Finance.
The committee is pleased to hear that the Comptroller General expects to engage the IPC in a privacy impact assessment related to this issue in the 2018-2019 fiscal year, but is disappointed that this has not already been completed, given the committee's concerns. The committee was also interested to learn that ECE has since amended its student loan application to clearly identify that remissions will be disclosed in the public accounts. This suggests that the information was, before the amendment, being collected and disclosed in a manner inconsistent with the requirements of the Access to Information and Protection of Privacy Act.
To address the concern about the optics of reporting loan remissions and bad debt write-offs and forgiveness in the same schedule, the committee considers that a simple solution might be for the GNWT publish the forgiveness and write-off of bad debts in a separate schedule from student loan remissions. The committee discussed the viability of this option with the Office of the Auditor General, whose officials indicated that they did not see any impediment to this approach. Therefore, the committee makes the following recommendation: